HanseMerkur Grundvermögen AG (HMG) has expanded its lending offering for real estate investors with the launch of the "Private Real Estate Debt Fund VI". This fund is designed to provide first-lien secured loans, both as whole loans and senior loans, for high-quality, cash flow-generating real estate assets. The focus is on existing properties in Germany, Austria and Switzerland.
The new fund's first transaction has already been completed: it involves financing a new-build hotel in Düsseldorf, North Rhine-Westphalia. The property is leased long-term to an established hotel operator and is characterised by stable cash flows and high asset quality. Malte Andes, Deputy Chairman of the Board of HanseMerkur Grundvermögen AG, points out that the market demand for whole-loan financing has increased significantly. The new fund offers borrowers reliable one-stop financing and provides institutional investors with access to a diversified portfolio of high-yield real estate financings.
Market conditions and strategy
The current real estate financing market continues to be characterised by the effects of interest rate reversals, increased construction costs and more selective lending by banks. Malte Andes explains that many investments and refinancings are not currently failing due to the fundamental quality of the properties or their locations, but because existing financing structures no longer match the changed market conditions. In addition, regulatory requirements increase the capital requirements for credit institutions. This leads to financing gaps, which are increasingly being closed through cooperative models between banks and private financing funds.
The "Private Real Estate Debt Fund VI" complements the offering of the previously launched sub-fund "Private Real Estate Debt Fund V", which focuses on mezzanine and syndicated financings. The new fund exclusively provides first-lien secured loans for existing properties. The investment focus is on properties with solid debt service capacity. This includes new-build office and residential properties, local supply centres, logistics properties, mixed-use properties and hotels in established locations or at sites with identifiable development potential. Both debt funds target German and international institutional investors. The HanseMerkur Insurance Group will maintain a permanent stake of 20 to 30 per cent in the portfolio. The fund volume for both sub-funds is designed for up to EUR 500 million each.
The "Private Real Estate Debt Fund VI" is classified as an Article 8 fund according to the EU Disclosure Regulation. This implies the consideration of environmental, social and governance (ESG) criteria in its investment decisions. Antje Gause, Head of Financing and Investment Management at HanseMerkur Grundvermögen AG, confirms that the loan provides tailored financing for an established hotel property with stable cash flows. She emphasises that the first financing transaction underlines the company's strategy to specifically invest in high-quality properties with sustainable income profiles in the Private Real Estate Debt sector.
First transaction and operational processing
The first transaction of the "Private Real Estate Debt Fund VI" involved granting a Green Loan of EUR 40 million to a company within the Dr. Peters Group. This loan serves to refinance the Holiday Inn Express Düsseldorf Airport. It is a first-lien secured existing property financing. The hotel, which opened in December 2022, has 324 rooms and is part of the Dr. Peters Group's existing real estate portfolio. Operational management is handled by the tristar Hotelgruppe. The Hauck Aufhäuser Fund Services Group acts as a proven partner and assumes both the AIFM and administration functions for both sub-funds, thereby ensuring comprehensive support.
HanseMerkur Grundvermögen manages real estate assets of approximately EUR 7 billion, of which over EUR 1 billion is invested in financing funds. In total, the company has provided real estate loans amounting to approximately EUR 1.6 billion.
